LG issues 215 mil. Swiss franc bonds

By Kim Yoo-chul

LG Electronics said Wednesday that it has successfully issued Swiss franc-denominated corporate bonds worth about 263 billion won (215 million Swiss francs) with a maturity of four years and five months.

Coupon rates were 2 percent, which LG officials believe is ``quite low’’ and the maturity schedule has been set for December 2016, according to LG in a statement. Company spokeswoman Na Joo-young said this is the first time that an Asian company has issued bonds based on the Swiss franc since 1996.

In times of economic and financial strife, big companies and investors inevitably seek to transfer funds to less volatile currencies, happy to accept lower returns to protect their principal capital from shrinking.

The Swiss franc is one of the safe haven currencies that has attracted an unwanted volume of foreign investment since the start of the financial crisis.

LG said money raised by selling the bonds will be used to pay off debt. ``LG Electronics will diversify fund-sourcing channels,’’ said the company spokeswoman.

The company held business road-shows in Geneva and Zurich on May 29 and 30. It briefed parties on its business strategies in film-patterned 3D televisions and smartphones that use advanced Long Term-Evolution (LTE) networks, receiving good responses from investors, according to Na.

LG is increasing its market share for 3D sets as they are less pricey than Samsung’s sets that require battery-powered glasses, while it is seeing a mild recovery in its smartphone business helped by impressive sales of its Optimus-branded variants.

Na declined to comment on any further plans by LG to issue bonds overseas. The company expects to boost its profit in the current quarter.